Some will argue that saber rattling was the catalyst: The Ukraine president was quoted as saying, "There is a real risk of war as it appears as though Russia is ready to invade Ukraine, and hopefully international efforts can end the aggression." Others will point to the potential for loan defaults in China and the counter-party contagion that could follow.More likely than not, it is a combination of both.
Adding spice to the mix -- as if the mix needed spice -- is the plethora of technical patterns at inflection point, and In no particular order:
S&P (INDEXSP:.INX) 1850: Where the breakout began and (by definition) where the bulls must hold if there is to be a breakout. If this level fails, there will be a lot of traders sitting in risk without a catalyst.
NDX (NASDAQ:NDX) 3640: This is the corresponding level for tech; while it's not all-time highs, it is the near-term pivot point.
IBB (NASDAQ:IBB) 260: Biotech led the market higher, and lately it's led the market lower. IBB 260 is the technical toggle that will define the near-term momentum.
NKY (INDEXNIKKEI:NI225) 14,700 and NKY 14,000: Japan is sitting on a near-term trend-line, which is the only technical support between current levels and NKY 14,000. And if Japan breaks NKY 14K, it works (through a pure technical lens) a full 16% lower, to NKY 11,680.
SHCOMP 1985: The Shanghai Composite (SHA:000001) rallied 1% last night, holding its respective level of lore despite all sorts of chatter of an imminent wave of defaults. This juncture in China reminds us of September 2008 in the US, but that remains to be seen. A picture, however, speaks 1,000 words; a break below SHCOMP 1985 works 10% lower.
Now, the bulls fully understand the gravity of the moment; they know perception is reality and that IF they can hold the line in the S&P and NDX, this will be textbook basing (above support) rather than churning (under resistance). That's how important these levels are; they're literally worth billions, if not trillions, of dollars.